Paper tiger

Illinois economy is big and bad  and not in a good way

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The state of the state is surprisingly weak,
according to a comparative analysis of Illinois’ economy published by
the Commission on Government Forecasting and Accountability. The 10-member bipartisan commission, which provides
the Legislature with information on economic issues, found that despite
high regional and nationwide total rankings for Illinois in gross domestic
product, wages, and personal income, Illinois’ rate of growth in
these categories was low compared with those of other Midwestern states. “Overall, Illinois’ economy is one of the
largest and most diverse in the country. The people of Illinois receive
high levels of income and enjoy a high standard of living. Illinois has
lagged behind the rest of the country in recent years in terms of growth in
these categories. Illinois also has experienced a higher level of
unemployment than most of the rest of the country,” the report
states. Some of the other key findings of the 41-page report:
 On the basis of domestic product, Illinois has
the fifth-largest economy in the U.S. at $590 billion.  Growth in GDP, wages, and personal income has
been poor over the past 10 years.  Illinois has had the third-slowest workforce
growth in the nation despite having the fifth-largest number of workers.  Unemployment in the state has consistently
been 5 percent higher than that in the rest of the nation, and since 1977
it has exceeded the national average 70 percent of the time. Illinois’ economic growth has not kept
pace with the growth of the U.S. economy as a whole over the past 30 years.
Beginning around the time the lawmakers arrived in
Springfield in February and heating up when Gov. Rod Blagojevich announced
his intention to pour more money into to education and state health-care
benefits, the state’s economy has been the subject of intense debate
this year. The business community protested the governor’s proposal
for a gross-receipts tax — which, he hoped, would pay for his new
programs — and other groups objected to any expansion of services,
given the state’s unpaid pension obligation and a backlog in Medicaid
payments. Benjamin Varner, the revenue analyst who authored the
report, says its timing had nothing to do with political and economic
discussions taking place around the state: “We weren’t trying
to move an agenda.” Having worked for the commission for two years,
Varner adds that he was not surprised by the findings, noting that over the
past 30 years Rocky Mountain states such as Nevada, Utah, Colorado, and
Arizona have experienced GDP growth of more than 8 percent per year, to the
detriment of states in the Midwest and Rust Belt, where growth has been
sluggish. Joe Calomino, the Illinois director of Americans for
Prosperity, a national organization that supports conservative fiscal
policies, says the report shows the need for budget reforms. Calomino, whose organization was among the leading
critics of the GRT, says his group favors more transparency and
accountability in the budget process and control of spending, perhaps
through the implementation of a zero-based system in which all expenditures
must be justified yearly for some state agencies, and wants to make
Illinois more business-friendly. “There is a problem with how government does
business. We don’t have a true effort to get things fixed. If we ran
government a little more like a business, you wouldn’t see some the
problems we see now,” he says. Contact R.L. Nave at rnave@illinoistimes.com